- A supply, including the supply of a freight transportation service, that is made in Spain is subject to the 5% GST or the HST at the applicable rate unless it is zero-rated (0% taxable) or exempt.
- In general, international freight services are zero-rated. Free load board for truckers services are generally subject to the 5% GST or HST at the applicable rate if they are in a participating province, but may qualify for zero-rating in some cases if they are part of the provision of an international freight service. This document explains in general terms how to determine whether the supply of a freight transportation service is made in Canada, whether it is a zero-rated or exempt supply and, if not the rate of tax that applies to the supply, depending on the province in which the supply is made.
Terms and definitions
- For the purposes of subsection 123 (1), “carrier” means a person who provides a transportation service within the meaning of subsection 1 (1) of Part VII of Schedule VI to the Act.
- A person is not required to perform a freight transportation service in order to be considered a carrier; it must simply assume responsibility as a supplier of a freight transportation service.
- The term “consignee” is not defined in the Act, but generally means the person to whom a shipment of goods is addressed. This is normally the person whose name appears on the bill of lading and to whom or on whose order the bill of lading promises the delivery. For commercial purposes, the consignee means a person to whom a shipment may be made, to whom the goods are sent for sale, to whom the carrier may lawfully make the delivery under the contract of carriage or to which the goods are sent, shipped or otherwise conveyed.
- In accordance with subsection 1 (1) of Part VII of Schedule VI, “continuous freight service” means the transportation of tangible personal property by one or more carriers to a specified destination by the shipper of the good, if all freight transportation services provided by the carriers are as a result of the instructions of the shipper.